An Analysis of Selective Credit Controls in India: 1955-56 to 1985-86

This paper attempts to analyse the impact of selective credit controls (SSCs) on outstanding bank credit for selected agricultural commodities rice, wheat, sugar, cotton, jute and groundnut. The period covered for the analysis is from 1955-56 to 1985-86. The operation of SSCs are analysed with the help of frequency and regression analysis using the available monthly data. The observations are consistent with the objectives of SSCs. The tendencies for bank credit under sec to be expansionary in busy season and contractionary in lean season are supported. The regression results, suggest that there is in general one to two months lag in registering the impact of price movement on the changes in bank credit. The analysis also reveals that past growth of bank credit has a positive bearing on current growth of bank credit.